A portfolio review involves assessing the performance of your assets and determining your investment strategy for the future. If your investment portfolio spans a number of different asset classes e.g. property and stocks and shares, you may have different benchmarks to measure against depending on the investment type. However, when it comes to a property investment portfolio review, you will want to examine a number of different factors including: 

Rental yields: Being aware of the yield you are achieving and whether the rent covers any mortgage payments you have is essential. You might have a target yield in mind for each of your properties and should measure current performance against this to assess how your portfolio is performing.

Capital growth: It is important to be aware of any price growth you have achieved on your portfolio to calculate return on investment and work out if you can release any equity to fund future investments.

Supply and demand: It’s worth looking at any recent changes in the local market or in the economy that may have an impact on your ROI. For example, has there been a surge in demand for 1-bed city centre apartments that might mean you could increase rental prices and therefore achieve a better yield?

Equity available to leverage: If you’re looking at financing more investments in the near future, it’s useful to know if you have equity in your current portfolio that could be leveraged.

Length of ownership: Property investment today is usually considered to be a long-term investment strategy due to the costs of purchasing, e.g. Stamp Duty Land Tax, making short-term investments or ‘flipping’ less favourable. Assessing how long you have owned each of your assets will help you benchmark performance. A property you have owned for ten years will likely have a higher ROI than one you have owned for two years.

Locations and diversification: Portfolio diversification isn’t just about investing in different asset classes, your property portfolio itself should also contain a range of different property types and locations to increase resilience and avoid poor performance should one property type or location fall out of favour.

Regularly reviewing your property portfolio is a must to ensure optimal performance and create a robust, long-term investment strategy. Looking at potential gaps in your portfolio and pinpointing underperforming properties can not only enable you to offload any assets that are no longer viable but also help to identify property types and locations you should consider for your next investment.

If you’re closer to the beginning of your investment journey and have a plan to grow your portfolio to a certain number of properties, a full portfolio review can allow you to build an accurate investment timeline, for example if you are looking to invest in five properties over the course of five years, a strategy we discuss in the ‘How to Build your Property Empire’ guide, then regular reviews can ensure that you are meeting your goals.

Ultimately, the reason for reviewing your portfolio will be personal to you. It will give you clarity on the performance of your properties and whether they are helping or hindering your targets, give you peace of mind that underperformance isn’t going unnoticed, and give you the confidence that you are making the right decision for your next investment. 

If your portfolio review reveals that some or all of your properties aren’t performing as expected, don’t be alarmed! Knowledge is power and understanding where the weak spots are in your portfolio is the first step to getting back on track. You may find that one of your properties is prone to longer void periods, in negative cash flow or even draining your bank account with frequent maintenance needs. 

All of these issues can be easily addressed and the old saying ‘ignorance is bliss’ should definitely not apply here! It also doesn’t mean that you need to immediately offload these ‘problem’ assets. 

Identifying the causes of underperformance will allow you to make the changes required and make sure that if you do decide to offload a unit then you’re doing it for the right reasons. If you’re in negative cash flow and your rental income doesn’t cover the mortgage payments for a property, it is always worth looking at capital growth and length of ownership to see whether overall ROI is still positive. If you’re having issues with void periods, you might look at demand in the location of your property. If demand is high but your property is still remaining empty then it’s likely that the issue is with the unit rather than the market.

In our opinion, there is no ‘best time’ to review your portfolio, but if you’re getting your investment plans in place for the year ahead then it’s a great time to take stock and get a handle on your current portfolio performance. 

We have a range of different investments available across the UK to suit your portfolio requirements, whether you’re taking your first step into the UK buy-to-let property market or are an active investor. If you’re already confident that you know what you want from your next investment, you can explore all of our current developments here, or if you’re looking for more investment planning support then browse our library of resources and investment guides here.

Ready to review your portfolio but not sure where to start? We’d be happy to help! Our global team is on hand to guide you through assessing your portfolio performance and helping you to identify your next investment.

We’re committed to helping investors across the globe build strong, successful portfolios and work with trusted developers to deliver high-quality developments across the UK. With teams based in the UK, Middle East and Africa, we can tailor our recommendations to suit your requirements and investment goals. Get in touch to book a portfolio review with your local team and achieve optimum performance in 2024 and beyond.